Governance and Corruption in Azerbaijan: Key Points

Governance Structure

Azerbaijan has made efforts to improve its governance since 2005, with the establishment of:

• Commission on Combating Corruption: operationalized to tackle corruption issues
• Regional Anticorruption Bodies: set up to combat corruption at the regional level

Public Procurement Law

The Public Procurement Law (PPL) was developed based on UNCITRAL in 2001 and amended in December 2018. Key features include:

• Strengthening the link between procurement planning and budgeting processes
• Introduction of e-procurement to increase transparency
• Code of Conduct for procurement staff to promote ethics

Corruption Challenges

While Azerbaijan has ratified the UNCAC in 2005, it still faces challenges in combating corruption, particularly:

• Judicial Sector: requires improvement in addressing corruption issues

Corruption Perceptions Index (CPI)

In 2020, Azerbaijan ranked 129th out of 180 economies with a score of 30 out of 100.

Business Climate

The corporate governance framework is primarily included in:

• Civil Code
• Law on Banks
• Other laws

Initiatives like ASAN Xidmet have increased transparency, accelerated processes, and reduced costs for obtaining licenses.

Governance Indicators

According to the World Bank’s Worldwide Governance Indicators, Azerbaijan’s percentile rank in control of corruption improved from 9.51 to 19.71 between 2009 and 2019.

However, the country still faces challenges related to governance and corruption. The IMF 2019 Article IV Country Report on Azerbaijan highlights that corruption and weak governance are obstacles to structural reforms and an enabling business climate.